This is the bankruptcy case study for Jason from Joliet, Illinois. The person’s name and city has been altered so that privacy can be maintained. This person has never filed for bankruptcy before but is obviously struggling financially. He owns a single-family home worth approximately $200,000. He has an outstanding mortgage balance of $215,000, his monthly payment is $1689.00 and he is over $7000 in arrears to his lender. He is making payments on a 2012 Toyota Sienna which is a co-signed vehicle. The lien holder is Bank of America, the monthly payment is $480 per month and he is current on those payments. In terms of personal property, he has a checking account with an approximate balance of $230, household items valued at $500, clothing valued at $300, and no other personal property at all.
In terms of his household, he is currently single with five dependent children ages 14, 12, 7,3 and 1. He is currently working as a janitor and has been working in that capacity since 2003. His annual income is $35,000 per year. In terms of monthly expenses in addition to the home mortgage payment, he has $66 in water, $140 for electricity, $50 for cellular phone, $96 for cable TV, $40 in Internet, $500 in food, $160 in clothing, $60 in laundry, $70 in transportation, $116 in auto insurance, $368 in child support and $480 for his auto payment. It is clear that his monthly expenses exceed his monthly income by a large margin.
In terms of debt, he has credit card debt totaling over $150,000. He is in debt to about 15 different credit card lenders with balances ranging from $2000 all the way to $50,000. It is clear that a chapter 7 bankruptcy case would provide the most relief for this person. He can keep his house provided he can make payment arrangements or otherwise reorganize that debt. He can keep his vehicle provided he continues to make payments as he is currently up to date. He can eliminate the $150,000.00 or so in credit card debt that has accumulated over the past 10 to 15 years. He will also need to find additional income so that he does not fall back into debt in the future.
The recommendation here is a straight-forward chapter 7 fresh start bankruptcy for Jason from Joliet, Illinois. Chapter 7 would provide the relief that he needs and an opportunity to get back on his feet financially. As of now, he is spending way too much money per month on minimum payments and other debt. If he were able to eliminate his debt through a chapter 7 bankruptcy, he would have more funds available to provide for himself and his growing family.
